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Gold/Mining/Energy : Trico Marine Services (TMAR)
TMAR 22.410.0%Nov 7 9:30 AM EST
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To: Grommit who wrote (602)7/28/1998 1:42:00 PM
From: D.J.Smyth   of 1153
 
assuming day rates for supply vessels fall to $6K and utilization remains the same:

you come up with about $18.9 Mil rev for supply boats which is a reduction of $6,529 in total revenue from this quarter total.

However, we know that (a) supply boats available for the next quarter will increase from the current 35 to around 38 (contracts kick in for three more boats) and that (b) current contracts running are still getting between $7000 and $8200 per boat which extends into the 2nd half of the year (only new contracts are running at $6K) for supply boats; so net revenue reduction for the next quarter would equal less than $3 million assuming that (a) 1 extra lift boat comes back on contract as scheduled (b) day rates in the North Sea remain constant (which we know they will since these are long term contracts lasting into next year) and (c) crewline boat rates remain constant (crewline rates have varied little from quarter to quarter).

next year more boats are coming on line, utilization is expected to increase from current 70% to 90% for supply boats which gives them 5 more boats per quarter or net revenue approximating $24.50 million for supply boats only per quarter (utilization increases as drydocking repairs, double hulling is finished). North Sea contracts run through the end of next year so these rates will approximate the same as well. Interest expense will be markedly lower for all of next year as well. It's a stretch to come up with $.99 in earnings for 1999. they're justifying their short positon on the stock. and why not. they can do that.

Any new additional boat purchases will add to the bottom line.
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